RBI Monetary Policy : Repo Rate Held Steady, RBI Targets 6.5%+ Economic Growth

Overview RBI Monetary Policy Meeting Live Updates: The Reserve Bank of India (RBI) has kept the repo rate unchanged at 5.5%, maintaining a neutral policy stance during its August review. The central bank has also retained its GDP growth projection for FY26 at 6.5%, despite the economic headwinds from newly imposed 25% U.S. tariffs on Indian imports. RBI Governor stated that headline CPI inflation fell for the eighth straight month, reaching a 77-month low of 2.1% in June. The RBI reiterated its ambition for India to sustain growth above 6.5%. Monetary Policy Update In its latest monetary policy review, the Monetary Policy Committee (MPC) opted to keep the benchmark interest rate unchanged at 5.5%, despite growing calls for further easing amid cooling inflation. While the U.S. tariff move adds to the global economic uncertainty, analysts remain split on its long-term effect on India's monetary outlook. The RBI revised its inflation forecast for FY26 downward to 3.1% from the earlier estimate of 3.7% in June. However, CPI inflation is projected to rise to 4.9% in FY27. Amid moderating inflation and a challenging global environment, the RBI is adopting a measured approach—seeking to support domestic demand while managing external vulnerabilities. Repo Rate Decision The repo rate remains at 5.5%, following three consecutive reductions since February, amounting to a total cut of 100 basis points. This decision comes ahead of the festive season, a time typically associated with increased consumer borrowing and credit demand. The MPC continues to uphold a neutral stance, signaling a wait-and-watch mode as it balances growth and inflation dynamics.